Venture capital is private funding used to support risky new businesses and startups. Venture capitalists provide capital to startups and growing companies in exchange for equity. They seek high growth companies in sectors like technology and biotechnology. Venture capital firms are typically structured as partnerships and invest in companies that need funding for growth but cannot access traditional loans. Their goal is to nurture portfolio companies and exit through events like IPOs or acquisitions within 3-7 years.

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2. 1. Brief history and definition of Venture Capital;
2. Corporate structure and operation;
3. New sector of investment and conclusions
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3.  It’s a private funding used to support risky new
business and speculative ventures, usually with
high growth potential.
 A typical venture capital investment usually
involves the business owner giving up equity to
venture capitalist in return for funding.
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4.  Venture Capitalists are investment firms that
makes venture investment, providing capital for
start-up or expansion.
 They are looking for higher rate of return, bringing
their managerial abilities to small businesses with
great potential growth.
 Business Angels are private investor with huge
personal capital, looking forward to invest their
money in business which are not helped by
financial institutions because are too risky.
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5.  Venture capital firms are typically structured as
partnership;
 This comprises both high net worth individuals and
institutions with large amounts of available capital, such
as state and private pension funds, university financial
endowments, foundations, insurance companies, and
pooled investment vehicles, called fund of funds or
mutual funds
 VC firms in the United States may also be structured as
limited liability companies, in which case the firm's
managers are known as managing members.
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6.  Venture capitalists are typically very selective in deciding
what to invest in;
 Funds are most interested in ventures with exceptionally
high growth potential,providing the financial returns and
successful exit event within the required timeframe
(typically 3–7 years) that venture capitalists expect.
 Young companies to raise venture capital require a
combination of innovative technology, potential for rapid
growth, a well-developed business model, and an
impressive management team.
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7.  This sheme meets businesses having large up-front capital
requirements which cannot be financed by cheaper
alternatives such as debt.
 Intangible assets such as software, and other intellectual
property, whose value is unproven,explains why venture
capital is most prevalent in the fast-growing technology and
life sciences or biotechnology fields.
 Venture capitalists are expected to nurture the companies in
which they invest, in order to increase the likelihood of
reaching an IPO stage when valuations are favorable.
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8. According to the development of the company,
there are three types of financing with venture
capital:
1. Early
2. Expansion and development
3. Acquisitions and restructuring
To analyze these points, they can be divided in
several subgroups in order to stress the fact that
every step in a company lifetime involves a
different approach by venture capitalists.
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9.  Time of exit from the firm’s capital is almost never
predetermined, but depends on the development of the
company.
 In successful cases, divestments take place when the
company has reached the level of expected
development and the value of the company and thus the
membership, has consequently increased.
 Disinvestments happens when the conviction that is no
more possible to solve the situation created takes hold.
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10.  There are several ways of disinvestment,
depending on the type of business and operations
previously put in place and on results achieved.
Typical channels used by investors to sell shares
in their possession are:
1. the IPO of the subsidiary titles
2. sale of the securities to another firm or to another
institutional investor;
3. the repurchase of the participation by the original
business group
4. the sale to new and old members, resulting from
the merger of several companies in the meantime
achieved.
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11. • Companies are not quoted on a stock exchange –
they are “unquoted”
• Ownership of the business is typically restricted to
a few individuals.
 Family connection between the shareholders
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12.  Small companies rarely have a long history or
successful track record that potential investors
can rely on in making an investment;
 Larger companies can easier have access to the
international finance;
 Banks are particularly nervous of smaller
businesses due to a perception that they
represent a greater credit risk;
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13.  A common problem is often that the banks will
be unwilling to increase loan funding without an
increase in the security given.
 Problem of uncertainty relates to businesses
with a low asset base. These are companies
without substantial tangible assets which can be
use to provide security for lenders.
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14.  Focus on high potential growth small companies;
 It makes research on the company and it builds a
business plan fot the small company;
 Often venture capitalists buy company and after
restiring them,they sell them at an higher price.
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15.  A business angel is an affluent individual who
provides capital for a business start up;
 Usually in exchange for convertible debt or
ownership equity;
 A small but increasing number of angel investors
organize themselves into angel groups or angel
networks to share research and pool their
investment capital.
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16. Sectors of investment
Solar and geothermal energies represent two fixed
points for investments;
By the way, in recent years wind energy became the
top ranking, achieving the status of most actractive
technology among renewvables energies.
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17. Conclusions
From the previous table we noticed that venture
capitals prefer to acquire energy companies that
already own high skills;
This tendency is becaming quite the opposite in this
last years because of the improving of new
technologies that allow to manage better the risk of
borning firms.
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